10 loans, one address: Tampa philanthropist’s hotels got millions in federal aid

Dr. Kiran Patel’s companies got PPP loans worth more than $19 million. Here’s how he and others secured more than one loan.
The exterior of Wyndham Grand Clearwater Beach on Aug. 20, 2020 in Clearwater. K&P Clearwater Estate, the company that runs the hotel, received a federal Paycheck Protection Program loan of between $2 million and $5 million while also laying off dozens of staffers in the spring. At least 10 hotel companies owned by or tied to prominent Tampa philanthropist Kiran Patel got loans worth up to $34 million, according to a Times analysis of federal data.
The exterior of Wyndham Grand Clearwater Beach on Aug. 20, 2020 in Clearwater. K&P Clearwater Estate, the company that runs the hotel, received a federal Paycheck Protection Program loan of between $2 million and $5 million while also laying off dozens of staffers in the spring. At least 10 hotel companies owned by or tied to prominent Tampa philanthropist Kiran Patel got loans worth up to $34 million, according to a Times analysis of federal data. [ JONAH HINEBAUGH | Times ]
Published Aug. 27, 2020|Updated Aug. 28, 2020

When the coronavirus shut down spring break in March, the Wyndham Grand Clearwater Beach shut down, too. The resort laid off employees, expecting to hire them back soon — but ultimately extending the layoffs into fall.

Within weeks, the resort’s developer, K&P Clearwater Estate, received a federal Paycheck Protection Program loan worth more than $2 million. The loan, obtained through the Bank of Tampa and backed by the U.S. Small Business Administration, was forgivable as long as the money went to payroll and other qualifying expenses.

K&P Clearwater Estate shares a Tampa address with nine other companies operating upscale hotels and resorts in seven states. Each got a seven-figure loan.

They all share a managing partner: Tampa entrepreneur and philanthropist Dr. Kiran Patel.

Patel’s companies got the loans thanks to a provision allowing individual businesses beneath a corporate umbrella to apply for their own loans. U.S. Department of the Treasury data analyzed by the Tampa Bay Times shows hundreds of instances in which multiple Florida companies operating from the same address did exactly that.

The multiple-loan provision was intended to benefit owners and employees of chains and franchises in the hard-hit hospitality sector; local beneficiaries include the Columbia Restaurant, Metro Diner and MVP Holdings, a coalition of restaurants that includes PDQ and Glory Days Grill. Yet entities of all sizes took advantage, from Patel’s hotel portfolio to a Tampa dental care company to an auto detailer in Brooksville.

“Every business in this country was expected to apply, and did apply,” said Patel, who believes his hotels would have gone bankrupt without the loans. “Any business that had pre-COVID revenues dropping below 50 percent or 70 percent — pick a number — should be deserving to get some assistance.”

It’s not known exactly how much all these companies received. The Treasury has only identified companies receiving loans worth more than $150,000, but it only disclosed a range, such as $350,000 to $1 million, or $5 million to $10 million. Some companies contacted by the Times offered more specific figures; Patel, for example, said his 10 hotel companies got around $19 million. For loans of less than $150,000, the government did not name recipients.

Some companies, including publicly traded corporations like Ruth’s Chris and Autonation, received multiple loans, but returned them after criticism from watchdogs and government officials. Benihana National Corp., which operates Japanese steakhouses and sushi restaurants around the country, was approved for 46 loans worth between $19.25 million and $45.7 million through subsidiaries operating from its Aventura headquarters, although a Benihana spokeswoman said the company ultimately turned the loans down.

For franchisees, even those operating under a big name like Benihana, that money can mean the same as it would to a traditional mom-and-pop.

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“Those big companies are not sending checks to help the franchisees,” said Bernie Dandridge, an agricultural and small business development specialist at Florida Capital Bank in Jacksonville. “If you’re a franchisee, you own your own business.”

Related: These public Tampa Bay companies got millions in small business PPP loans

But Kyle Herrig, president of the nonpartisan watchdog group Accountable.US, which tracks federal pandemic spending, said allowing for multiple loans is not sound policy. That sort of provision, he said, inevitably benefits larger organizations with more resources — especially those that got loans in April, when smaller businesses were burning through cash on hand.

“What was sold to the American people is, this was a program to help mom-and-pop stores keep their lights on and withstand the economic crisis that’s been caused by the coronavirus,” Herrig said. “In reality, what we’ve seen is wealthy, well-connected businesses that were savvy were able to exploit those funds.”

* * *

In Tampa, owners of the Columbia Restaurant received eight loans worth between $5.75 million and $14 million for their businesses and eateries, including Ulele and Goody Goody. Caspers Company, which owns a string of McDonald’s franchises, the Oxford Exchange in Tampa, the Library in St. Petersburg and several ancillary companies, got six loans worth between $4.2 million and $10.35 million. Tampa-based Metro Diner got 22 loans worth $17.5 million for its network of franchisees, according to co-chairman Hugh Connerty.

Are all of them small businesses? It depends on your definition.

The general benchmark for Paycheck Protection Program loans was 500 employees or fewer, although a company with more could get one if it met other criteria, such as a cap on net income. Add a few 500-employee franchises together, though, and you get a lot more. The Columbia has more than 1,400 employees across its companies. Metro Diner laid off 4,000 employees early in the pandemic, Connerty said. Caspers Company would have laid off 4,000, said CEO Blake Casper.

“Because of the PPP loans, we were able to keep our employment levels as close to the pre-COVID levels as we could,” Casper said. “And that would not have been the case if we did not get those loans.”

Companies with centralized accounting and payroll departments often coordinated subsidiaries’ loan applications, usually from the same corporate address.

“People think of us as a restaurant company. We think of ourselves as a company of restaurants,” Connerty said. “Each one of them has different shareholders, different partners.”

Casper said for his company, it was the individual restaurants who benefited, not their parent company.

“The money was meant to go to our employees, and that’s where the bulk of it went, was right to them,” he said. “Did we need that? I think absolutely we did. I think it helped stabilize our economy. If it wasn’t there, we would have been in even worse shape than we are today.”

Restaurant companies tied to Tampa’s MVP Holdings, whose partners include Outback Steakhouse co-founders Chris Sullivan and Bob Basham, received 13 loans worth between $7.3 million and $18.1 million. In a statement, the company said the loans “have been a lifeline to enable us to save thousands of jobs across our brands during this pandemic and most difficult time for businesses in the history of this great country.”

While the multiple-loans provision was aimed specifically at the accommodations and food services industry, other businesses took the same approach.

Coast Dental, a Tampa-based network of dental labs with about 120 locations in four states, received at least eight loans worth between $6.15 million and $15.05. A coalition of businesses tied to the Econo Auto Painting brand obtained at least six loans worth between $1.5 million and $4.05 million; all listed the same address on Cortez Boulevard in Brooksville.

Coast Dental did not return voicemails and an email about its loans. Messages left with employees at two businesses tied to the Econo loans, including their accounting office, were not returned. Emails and a voice mail left with a Columbia Restaurant spokesman were not returned.

Related: A Florida landlord got a big PPP loan. Tenants got rats, mold and evictions

The idea that Metro Diner is “some huge, big corporation,” is a “misconception,” Connerty said. The partners in each restaurant “compare themselves to the mom-and-pops that they compete against. They are independently separate. So they’re treated that way.”

Metro Diner has permanently closed seven restaurants since the start of the pandemic. But otherwise, staffing is back to around 70 percent of its previous level, Connerty said.

“I can assure you, we as a company would never have survived this without the assistance of the PPP money,” he said.

Related: The Don CeSar cheated death decades ago. Now the pandemic is a new wrinkle in its history.

* * *

Patel, one of Tampa Bay’s wealthiest and best-known philanthropists, feels the same way.

Patel is a cardiologist-turned-entrepreneur who purchased and later sold two large health care companies, including WellCare Health Plans, which under his stewardship became a billion-dollar operation. He and his wife, Pallavi, have pledged $200 million to build a Clearwater campus of Nova Southeastern University and given tens of millions to organizations like the University of South Florida and the David A. Straz Jr. Center for the Performing Arts.

(Patel is part of a local investment group that in 2017 loaned the Tampa Bay Times about $15 million. In April, the Times and several related publications received a Paycheck Protection Program loan worth $8.5 million to restore salary cuts and avoid layoffs; the publications today employ 450 full-time and 170 part-time employees.)

In 2004, Patel spent $40 million on a waterfront swath of Clearwater Beach property that, after numerous delays and another $175 million in development, opened in 2017 as the Wyndham Grand Clearwater Beach. Over the last 15 years, Patel has invested in at least nine additional upscale hotels and resorts, some to different degrees with different partners, but all through LLCs based at the same Tampa office. Each received a loan worth between $1 million and $5 million.

Like most hospitality businesses, Patel’s hotels have laid off workers during the pandemic: 114 at the Hyatt Regency Sarasota; 129 at Pennsylvania’s Wyndham Grand Pittsburgh Downtown; 70 at Tuscon, Ariz.‘s Westward Look Wyndham Grand Resort and Spa; 60 at Redmond, Ore.‘s Eagle Crest Resort.

Patel’s most recent acquisition was the Hammock Beach Golf Resort and Spa, a 650-acre Palm Coast getaway with courses designed by Jack Nicklaus and Tom Watson, purchased around New Year’s for $18.26 million. In March, the resort began temporary layoffs of 246 workers.

“Nobody had planned for COVID,” Patel said. “These are all cyclical businesses, so sometimes, some go up, and some go down. The strategy was to have hotels that are in a variety of locations, so that they are dependent on different types of clienteles.

“We thought we were covering our bases by having a portfolio that deals with tourism and business. All of a sudden, when you drop from a revenue of $100 to zero over a period of two to three months, it’s a challenge. Thankfully, the government came up with a program that at least helped keep people like us, hotels and restaurants, afloat for a little bit.”

Patel does not believe his companies received preferential treatment for the loans; in fact, he said several of their applications were denied in the first round of Paycheck Protection Program funding.

“I hope that people understand that, just like every citizen (was) getting $600 or $1,000 a week, the businesses also need and should get some support,” he said. “And there should be a mechanism of converting these loans to debt if they’re not used for proper purpose, and should be paid back.”

Data consultant John McCambridge, working in coordination with the National Press Foundation, contributed to this story.

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